In the long-run money supply and money demand model, the slope of the money demand curve is _____, and the slope of the money supply curve is:

Question

Quizplus · Accepted Answer

In the long-run money supply and money demand model, the money demand curve is downward sloping because as the interest rate decreases, the quantity of money demanded increases. The money supply curve is vertical because it is determined by the central bank and does not depend on the interest rate.

In the Long-Run Money Supply and Money Demand Model, the Slope